Philippine Peso Erases Gain Before Export Data; Bonds Advance

April 10 (Bloomberg) -- The Philippine peso dropped, reversing an earlier gain, before a government report this week that may show export growth slowed in February. Bonds advanced.

Overseas sales increased 1.7 percent in February, compared with a revised 3.1 percent gain in January, according to the median estimate of economists in a Bloomberg News survey before data due April 12.

“With export data coming in, the market is wary of driving the peso higher,” said Lito Mercado, head of trading at Rizal Commercial Banking Corp. in Manila.

The peso fell 0.1 percent to 42.84 per dollar at the close in Manila from April 4, according to Tullett Prebon Plc. Local markets were shut from April 5 through April 9 for public holidays. The currency reached 42.75 today, the strongest level since April 4. One-month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 5.70 percent.

The yield on the Philippines’ 5 percent bonds due August 2018 fell three basis points, or 0.03 percentage point, to 4.83 percent, according to prices from Tradition Financial Services.

The government sold 9 billion pesos ($210 million) of five-year bonds at an average yield of 4.61 percent today, lower than the 4.67 percent at the last auction of similar-maturity notes in January 2011, according to the Bureau of the Treasury.

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